Pershing Square's funds are up, Ackman talks United Tech

BOSTON (Reuters) - Billionaire investor Bill Ackman said on Tuesday all his funds are now in the black for the year to date, helped by investments in Chipotle Mexican Grill Inc (CMG.N) and Automatic Data Processing (ADP.O).

For Ackman’s $8 billion Pershing Square Capital Management that marks a welcome turnaround after three consecutive years of losses at the activist hedge fund.

All funds are in “slightly positive territory” as of Friday, Ackman said on a telephone call with investors. He said his team was also working on establishing a new position that will be substantial, but declined to name the company.

The hedge fund manager and his partners spent some time discussing United Technologies Corp. (UTX.N), a relatively new position that Ackman said he was trading at a discount. A regulatory filing, made late on Tuesday, shows that Pershing Square owned 1.9 million shares at the end of the first quarter.

Like rival fund manager Daniel Loeb, whose Third Point is also invested in United Technologies, Ackman said the conglomerate would fare better by breaking itself into three separate businesses; aerospace, elevators and climate-control businesses.

“We think each business would trade at a very attractive valuation, and more importantly operate more effectively as independent companies,” Ackman said. Two weeks ago, Loeb essentially told his clients the same thing..

As Ackman works to recapture the kind of returns that made him famous nearly a decade ago, he announced another big personnel move. Stephen Fraidin, 78, a lawyer who joined Pershing Square as vice chairman in 2015, is leaving to return to practicing law.

Fraidin, most recently a partner at Kirkland & Ellis LLP, said it was an appropriate time for him to return to representing companies in mergers and acquisitions transactions. He did not say where he was going.

Ackman announced in January that he was shrinking the firm and planned to spend more time on investments and less on being Pershing Square’s chief marketing officer.. On the call he said he would not try to raise big amounts of new cash. “If we can run our business effectively and compound at a high rate over time, our capital base will grow at a very nice rate and that has worked well for us.”

Fraidin, who has known Ackman for 40 years, will continue to sit on Pershing Square’s five- person advisory board. He will be joined by Dawn Lepore, former CEO of online retailer Drugstore.com and former chief information officer at brokerage Charles Schwab.